Unemployment rate drops to 8.3%, 243K jobs added

posted at 8:40 am on February 3, 2012 by Ed Morrissey

The US economy had a good month for job creation in December, according to the new report this morning from the Bureau of Labor Statistics. We added 243,000 net jobs and the unemployment rate fell two-tenths of a percent to 8.3%:

Total nonfarm payroll employment rose by 243,000 in January, and the unemployment rate decreased to 8.3 percent, the U.S. Bureau of Labor Statistics reported today. Job growth was widespread in the private sector, with large employment gains in professional and business services, leisure and hospitality, and manufacturing. Government employment changed little over the month.

There seemed to be a glimmer of hope on workforce participation, too, although not much motion:

After accounting for the annual adjustments to the population controls, the employment-population ratio (58.5 percent) rose in January, while the civilian labor force participation rate held at 63.7 percent. (See table A-1. For additional information about the effects of the population adjustments, see table C.)

The number of persons employed part time for economic reasons, at 8.2 million, changed little in January. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job. (See table A-8.)

In January, 2.8 million persons were marginally attached to the labor force, essentially unchanged from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-16.)

The key measure of labor underutilization, the U-6 number, declined slightly on a seasonally-adjusted basis to 15.1% from 15.2% in December. That is the lowest U-6 number since February 2009, although it’s still far above the 8-9% range of the second Bush term. That measure dropped most significantly in the fourth quarter of last year, falling 1.2 points.

There were some changes made to the surveys this month, which is a routine part of adjusting for population shifts. In this case, it tended to be a wash for the overall jobless rate but lowered participation rates by three-tenths of a point. That’s why the report says that the civilian-population participation rate was unchanged at 63.7% when it had been 64.0% in December. The BLS will not restate past results as part of their update. The U-6 numbers are not based on that survey and so are more consistent within their series.

Employers have added an average of 201,000 jobs per month in the past three months. That’s 50,000 more jobs per month than the economy averaged in each month last year.

The Labor Department’s January jobs report was filled with other encouraging data and revisions. Hiring was widespread across many high-paying industries. Pay increased. And the economy added 200,000 more jobs in 2011 than first thought.

And the unemployment is nearly a percentage point lower than over the summer, when feared a recession was imminent. The last time the unemployment rate has dropped for five straight months was in late 1994.

January’s non-farm payroll with a 243k increase was sharply above a consensus increase of 150k with positive if undramatic back month revisions. The breakdown looks positive almost across the board with manufacturing at +50k particularly impressive. Workweek data was improved, sustaining an upwardly revised December level, though hourly earnings with a 0.2% rise merely met consensus. The unemployment rate saw another significant fall, by 0.2% to 8.3%, when the consensus was for no change, with the fall due to increased employment not losses in the labor force. The broader U-6 measure of labor market slack, after three straight 0.4% plunges, saw only a modest fall of 0.1% to 15.1%, but there can be no doubts over the positive nature of this report. There is only one obvious significant caveat, an unusually mild winter restricting the number of seasonal layoffs, which are always heavy in January. Unadjusted, January payrolls still fell by 2.689 mln.

We’ll see if this continues, or whether it plateaus as the CBO expects. If it continues, Barack Obama might start seeing his approval numbers sliding upward again.

Update: Zero Hedge points to a curious change in the number of people not in the labor force:

A month ago, we joked when we said that for Obama to get the unemployment rate to negative by election time, all he has to do is to crush the labor force participation rate to about 55%. Looks like the good folks at the BLS heard us: it appears that the people not in the labor force exploded by an unprecedented record 1.2 million. No, that’s not a typo: 1.2 million people dropped out of the labor force in one month!

I’m looking at the A-16 historical record (for people not in the labor force, not seasonally adjusted), and the number of people 16 years or older not in the work force changed from 87,212,000 in December 2011 to 88,784,000 in January — which is an increase of 1.572 million, not 1.2 million. That doesn’t affect jobs added, which are calculated in a separate survey, but it would tend to impact the U-6 rate by increasing the denominator of the calculation, which would lower the resulting ratio or percentage. Let’s take a look at the raw numbers in those categories:

Want a job now (in thousands, total set) — 6495, up from 6135 in December

Plus, Available to work now — 2809, up from 2540

Plus, Discouragement over job prospects — 1059, up from 945

Plus, reasons other than discouragement — 1749, up from 1595

The drop in the U-6 looks like it’s indicating a decline when we’re in fact seeing a modest increase in discouragement, even with the added jobs.

Update II: Steve Eggleston writes to tell me that Zero Hedge was looking at seasonally adjusted figures from table A-1 while I was checking A-16. The change in A-1 is 1.177 million, rounded up to 1.2 million. Also for clarification, the “plus” items in the bulleted list above are subsets of the “Want a job now” category.

Sorry but I am just not seeing it in my little corner of the world. Several companies have announced plans to relocate to Georgia or open new facilities but aren’t expected to begin hiring until the end of this year at the earliest with most in 2013 – 2014.

You know that unemployment will be magically non-existent come November right? Which means the whole justification that Romney needs to be elected to improve the economy will be moot. Can someone remind me what other reasons there were to nominate him?

Very impressive and strong reading. This is what was happening last year before the tsunami hit Japan and Libya exploded. The numbers were strong across the board, and they went back and added jobs to the baseline for last year. A very, very strong reading ….

The economy is clearly on the mend, and the double-dip predicted last Summer has faded from memory. I may need to revise my New Year’s prediction: Dow 13K by Easter Fat Tuesday. Here we go …

That unfortunately can’t be manipulated or spun. Some refineries are shutting down and there’s always the threat of Iran to potentially spook the market even more. So we may be stuck paying $3.40+ a gallon at the pump for the foreseeable future.

The Republican campaign strategy of choking the recovery with ludicrous posturing over the debt and ill-timed attempts to cut spending becomes even more urgent now. They will certainly do everything they can to push Americans back out of work between now and November.

Sooooo, for the first time in 5 years the Labor dept doesnt subtract out over 300K jobs that were over estimated during the year due to the birth / death rate? BS! Unfortunately the public is too stupid to realize they are getting snowed!

Oh hail the great emperor of the American empire. He has done it again.

liberal4life on February 3, 2012 at 8:49 AM

First of all, the word “emperor” is kind of creepy, even for a full-douche liberal. Second, congratulations to President Obama on his ability to keep scooping the water out of our cruise liner with a dixie cup.

The Republican campaign strategy of choking the recovery with ludicrous posturing over the debt and ill-timed attempts to cut spending becomes even more urgent now. They will certainly do everything they can to push Americans back out of work between now and November.

urban elitist on February 3, 2012 at 8:52 AM

Or they’ll stop Democrats from passing anything they want to pass, and we’ll actually have a recovery.

The recession started once the Democrats took over Congress and began their meddling waaaaaay back in 2007, genius.

No. Good news (even if it’s a lie) is always expected because Obama is the Messiah who brings good news. Bad news (even if it’s under-stated) is always unexpected, because Obama is the Messiah who is always expected to bring good news.

The Republican campaign strategy of choking the recovery with ludicrous posturing over the debt and ill-timed attempts to cut spending becomes even more urgent now. They will certainly do everything they can to push Americans back out of work between now and November.

urban elitist on February 3, 2012 at 8:52 AM

Gridlock, it does an economy good. But you’re too dense to realize that.

First of all, the word “emperor” is kind of creepy, even for a full-douche liberal. Second, congratulations to President Obama on his ability to keep scooping the water out of our cruise liner with a dixie cup.

Smoke and mirrors, but of course the media eats it up in favor of ØbaMaØ.
Hasn’t Obozo already doubled the White House staff?

Everyone with two brain cells to rub together knows good and well that the true number is at least TWICE that Bravo Sierra. Slappy and his perp-peeps will milk this ’til the cows come home. Sadly, but not unpredictably, Barry and Moochelle have no clue where milk comes from so the LSM will carry the milk cans for them.

Or they’ll stop Democrats from passing anything they want to pass, and we’ll actually have a recovery.

The recession started once the Democrats took over Congress and began their meddling waaaaaay back in 2007, genius.

Good Lt on February 3, 2012 at 8:55 AM

The housing bubble started bursting in late 2006, when the Republicans controlled the White House and both the Senate and the House. Your economic history is frankly incompetent.

Plus, the idea that a Democratic House facing a filibustered Senate and a Republican President (or the reverse situation with a D in the White House and Rs in the congress) could significantly effect the economy in six months is frankly ludicrous.

So, once again, other than the economy why else were we nominating Romney? It certainly wasn’t because he was going to really kick butt and rein in government. It wasn’t because he was the best guy to go up against Obama on Obamacare. Oh, I remember, he is good looking and has a nice family.

with ludicrous posturing over the debt and ill-timed attempts to cut spending

ROFL, as if $16 trillion in debt and the federal government spending an extra $10 billion every single day is nothing to worry about. Just raise the tax rate on the rich by 5% and everything will be fine.

I miss the days of Dubya when the left was frothing about the $450 billion deficit. “We’re all going to die! The economy is ruined! Fiscal disaster! Third world here we come!” they screamed.

Oh hail the great emperor of the American empire. He has done it again.

liberal4life on February 3, 2012 at 8:49 AM

I thought you saw your shadow yesterday and should be back down in the hole for another six weeks.
We know math is hard for you, and we don’t have the popsicle sticks right now to show you addition and subtraction.
If we wanted your opinion…We would phart!

The housing bubble started bursting in late 2006, when the Republicans controlled the White House and both the Senate and the House. Your economic history is frankly incompetent.

When it became evident Democrats were going to win Congress, the recession started. It continued unabated under their rule – picking up steam in 2007 when the Democrats started their drunken spending binge.

Fact.

Plus, the idea that a Democratic House facing a filibustered Senate and a Republican President (or the reverse situation with a D in the White House and Rs in the congress) could significantly effect the economy in six months is frankly ludicrous.

urban elitist on February 3, 2012 at 9:00 AM

And yet, here we are recovering with a GOP House (soon to be Senate) and an idiot in the White House whose Grand Designs were foiled due to the country sending him a message last year.

Bad news for Mitt Romney!!! The only slim chance that a avowed “progressive” who is, as George Soros says, “not that much different than Obama” had to defeat Obama is if the economy still looks terrible.

Good bye putative independent and moderate voters…they will now stay with Obama

And the since the Repubs look like they have decided against nominating a conservative, just like in 2008, we can expect another 2008. Obama gets four more years to tear up the Constitution.

And gas up to $3.459 at the beginning of February. I’m sure the economy can keep eeking out anemic growth as energy supply/generating capacity continues to fall. Because a Harvard Poli Sci retard has decreed it!

Job growth was widespread in the private sector, with large employment gains in professional and business services, leisure and hospitality, and manufacturing. Government employment changed little over the month.

Almost none of it was government jobs. I’m still not understanding how the unemployment continues to drop so rapidly when we’re not even creating a quarter of a million jobs a month(and sometimes far less than that). The job numbers are good, but not great. But the steep drop in unemployment looks very suspicious.

When it became evident Democrats were going to win Congress, the recession started. It continued unabated under their rule – picking up steam in 2007 when the Democrats started their drunken spending binge.

This is one of the most absurd partisan point-scoring attempts I’ve ever seen. Absolutely feeble.

Bad news for Mitt Romney!!! The only slim chance that a avowed “progressive” who is, as George Soros says, “not that much different than Obama” had to defeat Obama is if the economy still looks terrible.

Good bye putative independent and moderate voters…they will now stay with Obama

And the since the Repubs look like they have decided against nominating a conservative, just like in 2008, we can expect another 2008. Obama gets four more years to tear up the Constitution.